By Will Atwater
Takeaways:
Data centers could raise electricity costs for North Carolina customers.
Amazon’s Richmond County data center project faces scrutiny over 645 proposed diesel generators.
Flexible data-center power use could delay costly grid upgrades.
On July 24, nurses and environmental advocates gathered outside the General Assembly in Raleigh to protest the North Carolina AI Leadership Council’s new strategic road map for the state’s adoption and use of artificial intelligence.
Protesters raised concerns, among other topics, about electricity costs and new energy infrastructure required to power proposed data centers across the state.
“Duke Energy has received tax breaks for three data centers that it owns, and the utility is proposing a 15 percent rate hike on its North Carolina customers,” Ajamu Dillahunt-Holloway, an N.C. State University assistant professor of African American History and Public History and a North Carolina Environmental Justice Network board member, told the crowd in front of the legislature.
A week after the General Assembly protest, Richmond County residents and allies gathered outside the Old Richmond County Courthouse in Rockingham before a public hearing held by the N.C. Department of Environmental Quality. The hearing concerned separate air-permit applications from Amazon and Duke Energy tied to Amazon’s proposed data-center campus.
“We were sold a story about investment, jobs and progress,” Shaun Ingram said during a press conference at the Rockingham event. ”But now we are looking at air permits, generators, turbines, emissions, noise, water demand and risks to communities that are already overburdened.”
The concerns about electricity’s costs extend beyond data-center opponents. Attorney General Jeff Jackson said last month that Duke Energy Progress understated the impact of a proposed settlement reached with the state over energy rates. Duke told regulators that residential rates would rise 6.8 percent over two years, but Jackson’s office argued that residential customers would instead pay about 9.3 percent more.
“The details matter here, and Duke got it wrong under oath,” Jackson said in a news release from his office.
The protests and permit fight point to a broader question for North Carolina: How should the state meet the enormous electricity demand expected from hyperscale data centers? Critics fear the answer will be new power plants and the pollution that comes with it, new transmission lines, higher customer bills and additional pollution in rural communities.
Who pays for growth?
The North Carolina Energy Policy Task Force reported that data centers make up 30 percent of economic-development projects in Duke Energy’s pipeline in North and South Carolina but account for 80 percent of their projected energy demand through 2030.
All that extra need calls for more capacity to power it.
Aside from the rate settlement, Duke Energy Carolinas has asked state regulators to approve a rate increase that, if approved as filed, would raise the average residential bill from about $143 a month to about $168 by 2028 — an increase of about $25 a month, or 17 percent over two years — according to the N.C. Department of Justice.
That’s all as Duke Energy Corp. is booming, reporting $4.9 billion in profits in 2025.
Amazon has said it will invest $10 billion in the Richmond County AI and cloud-computing campus and create at least 500 jobs. Richmond County is a state-designated Tier 1 county, placing it among North Carolina’s 40 most economically distressed counties.
Duke Energy’s applications cover 645 diesel-fired generators: 588 emergency backup generators proposed by Amazon and 57 temporary generators Duke Energy would operate to provide “bridge power” until the site can connect to the grid, according to an N.C. Department of Environmental Quality release. The agency’s Division of Air Quality said air-dispersion modeling found that emissions from each facility were not expected to violate health-based air-quality standards.
But diesel engines emit fine particulate matter, often called soot, and nitrogen oxides. Exposure to these pollutants can worsen asthma and other respiratory illnesses, especially for children, older adults and people with existing heart or lung conditions.
“This is an area that has a disproportionately high amount of people with disabilities,” said Jasmine Crockett, a staff attorney for the Southern Environmental Law Center. “There is a high population of children under the age of five. There’s a high population of elderly people here, and those are the exact people who are expressly impacted by pollution that comes from diesel-powered generators.”
Buying time
Some argue there are ways to have both data centers and less demand on the grid.
A 2025 analysis by Duke University researchers offers one way to buy time before the capacity and the grid need to grow. The report co-authored by Tim Profeta of Duke’s Nicholas Institute for Energy, Environment & Sustainability, found that data centers and other large electricity users could help delay the need for some new power plants and transmission lines by agreeing to briefly reduce their electricity demand during the handful of hours each year when demand on the grid is highest.
On an average day, the U.S. grid uses 53 percent of the capacity it has,” Profeta said. “The other 47 percent is unused because we don’t build the grid for an average day. We build it for the hottest day in the summer or the coldest day in the winter, when everything is running and we need to make sure the power doesn’t go out.”
Profeta and his colleagues argue that there’s flexibility built into the system that would allow utilities to connect large new customers sooner while giving utilities and data-center developers more time to determine what long-term generation and grid upgrades are actually needed. They estimated that this approach could defer some grid-expansion needs by about five years.
The analysis found that the existing U.S. power system could potentially accommodate 76 gigawatts of additional demand if new large electricity customers agreed to reduce their use during periods of peak demand by only an average of a quarter of one percent of their annual operating time. That’s roughly equivalent to the annual electricity use of 63 million average U.S. homes.
The amount of additional demand the grid could accommodate would increase if new large customers committed to greater flexibility.
Lori Bennear, the Stanback Dean of Duke’s Nicholas School of the Environment and a professor of energy economics and policy, compared the approach to using the middle seat in a car rather than buying a larger vehicle for an occasional extra passenger.
“You have two kids, and you’re driving them to soccer practice all year long,” Bennear said. “Every once in a while, you’ve got to have a third kid in the car. You don’t go buy a bigger car; you just use the middle seat. We get the middle seat open a lot on our grid. But the challenge is how do you shift the load so that you’re using that middle seat more often rather than going out and buying all new cars?”
What’s at stake
In addition to finding ways to use the existing grid more efficiently, Profeta said there are two additional ways data centers could reduce the pressure they place on the grid in the short term.
One option would be for companies to build dedicated on-site power systems, such as gas turbines or generators that serve only the data center rather than connecting to the broader grid. That could ease near-term demand on the system.
The problem, though, is that this approach could also extend reliance on fossil fuels, depending on the technology used.
A second option would direct investment toward homes and businesses through rooftop solar, batteries and efficiency upgrades. When coordinated through software as a “virtual power plant,” those distributed resources can act together as a grid resource, potentially reducing peak demand while lowering homeowners’ bills and improving resilience for participating households and businesses, Profeta said.
“The appeal of this moment is that the federal policy incentives are not really needed to build these [virtual power plants] if the data center companies invest in what is needed (in order to free capacity and speed their path to power),” Profeta said in an email.
The N.C. Department of Environmental Quality’s Division of Air Quality is considering whether to issue the Amazon and Duke Energy air permits after the public hearing and comment period, which ended on July 31.
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